Expert comment: Chancellor's plans for UK economic growth

Categories: Salford Business School

In response to Chancellor Jeremy Hunt's speech, focusing on his plans for UK economic growth including cutting inflation as opposed to cutting taxes, Salford Business School Lecturer in Economics, Dr Mohammad Mahbubur Rahman, shares his thoughts. 

“I agree with Jeremy Hunt's view about the overall tax cuts. As we know, tax cuts create/increase a government budget deficit, which usually causes economic growth to fall if the government sector is significantly large. However, the government can consider revising the tax structure.

“On the other hand, how the government plans to cut the inflation rate in the short run is unclear. If the plan is to increase the interest rate further, that might create extra pressure on the already high mortgage rate and, thus, the cost of living.”

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